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Laurel Gardens, LLC v. MJL Enterprises, LLC

United States District Court, E.D. Virginia, Norfolk Division

July 18, 2018

LAUREL GARDENS, LLC, et al., Plaintiffs,



         This matter is before the Court on a motion to dismiss filed by defendant MJL Enterprises, LLC ("MJL") pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 60. MJL alleges that the Amended Complaint, originally filed in the Eastern District of Pennsylvania by Laurel Gardens, LLC, American Winter Services, LLC, Laurel Garden Holdings, LLC, LGSM, GP, and Charles P. Gaudioso (collectively, "Plaintiffs"): (1) is barred by a settlement agreement from a prior case litigated in this Court; and (2) alternatively fails to state a claim upon which relief can be granted. Id.

         A. Factual and Procedural Background

         On March 9, 2015, in a previous civil action filed in this Court, MJL filed a complaint against Laurel Gardens, LLC ("Laurel Gardens"), raising claims related to a contract awarded to MJL under the New Jersey Department of Transportation's "Good Neighbor Planting Program." Case No. 2:15cvl00/ ECF No. 34-1, at 1. Less than a week later, Laurel Gardens filed suit against MJL in New Jersey similarly raising claims associated with the Good Neighbor contract. Id. On May 6, 2016, Laurel Gardens and MJL entered into a global settlement agreement ("Settlement Agreement") with respect to both the "Virginia litigation" and the "New Jersey litigation." Id. The Agreement, which was filed on the docket of this Court, states in pertinent part:

The Parties agree to mutually release each other for all claims and disputes, asserted or un-asserted and arising out of, any acts, failures to act, omissions, misrepresentations, facts, events, transactions, or occurrences described in either the Virginia litigation or the New Jersey litigation, or otherwise related to the Good Neighbor contract.

Id. at 2-3. The Settlement Agreement further provides that Virginia law governed the parties' rights and duties and that the parties "consent[] to the jurisdiction of [this Court] with respect to any further litigation or dispute between the Parties, whether related or unrelated to this Agreement, the New Jersey litigation, the Virginia litigation, or the Good Neighbor contract." Id. at 4-5.

         On April 21, 2017, the instant civil action was filed in the Eastern District of Pennsylvania by Laurel Gardens, and several associated plaintiffs, against MJL and more than thirty other named defendants. ECF No. 43. Multiple motions to dismiss were filed by various defendants in that case, with MJL seeking dismissal under Rule 12(b)(6) and alternatively-requesting that the case against it be severed and transferred to this Court in light of the fact that the Plaintiffs' factual allegations were associated with the Good Neighbor contract and were therefore covered by the terms of the prior Settlement Agreement. ECF No. 60. Although the district judge in Pennsylvania denied the various defendants' Rule 12(b)(6) motions to dismiss, he granted MJL's alternative request, and "sever[ed] Plaintiffs' claims against MJL," transferring them to this Court with the express clarification that such ruling "does not address the merits of MJL's motion to dismiss for failure to state a claim." ECF No. 146, at 6 n.2. Subsequent to such transfer, no party has filed a motion, brief, or any other document in this Court relating to the merits of MJL's pending motion to dismiss. Such motion is therefore ripe for review.

         B. Standard of Review

         Federal Rule of Civil Procedure 12(b)(6) permits dismissal of a complaint, or a claim within a complaint, based on the plaintiff's "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). A Rule 12(b)(6) motion to dismiss must be analyzed in conjunction with Federal Rule of Civil Procedure 8(a), thus requiring that a complaint allege sufficient facts to render a claim "plausible on its face" and "raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact) ." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007) (internal citations omitted).

         In assessing the plausibility of a claim, a district court may "consider documents attached to the complaint, see Fed.R.Civ.P. 10(c), as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). Additionally, the court may take judicial notice of matters of public record relevant to an affirmative defense if such defense clearly appears on the face of the complaint. Id. Judicial notice is permissible when a fact can be "accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201.

         Here, MJL's affirmative defense seeks to rely on the release that was entered as part of a negotiated settlement of the prior case in this Court, and such prior case is referenced in Plaintiffs' amended complaint. See ECF No. 43 ¶ 219 (identifying the prior Virginia lawsuit between MJL and "the Company," to include a reference to the date such previous lawsuit was filed). MJL's reliance on the release executed in that case is procedurally similar to raising a defense of "res judicata," a defense that the Fourth has addressed as follows:

[The plaintiff] also argues that Rule 12(b)(6) dismissal of his lawsuit on the basis of res judicata was procedurally inappropriate because the defense of res judicata was not clearly established by the affirmative allegations of the complaint. We disagree. This Court has previously upheld the assertion of res judicata in a motion to dismiss. See Thomas v. Consolidation Coal Co., 380 F.2d 69, 75 (4th Cir. 1967). Although an affirmative defense such as res judicata may be raised under Rule 12(b)(6) "only if it clearly appears on the face of the complaint," Richmond, Fredericksburg & Potomac R. Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993), when entertaining a motion to dismiss on the ground of res judicata, a court may take judicial notice of facts from a prior judicial proceeding when the res judicata defense raises no disputed issue of fact, see Day v. Moscow, 955 F.2d 807, 811 (2d Cir. 1992) j[1] Scott v. Kuhlmann, 746 F.2d 1377, 1378 (9th Cir. 1984); Briggs v. Newberry County Sch. Dist., 838 F.Supp. 232, 234 (D.S.C. 1992), aff 'd, 989 F.2d 491 (4th Cir. 1993) (unpublished). Because [the plaintiff] does not dispute the factual accuracy of the record of his previous suit against [the defendant] in [his] official capacity, the district court did not err in taking judicial notice of this prior case.

Andrews v. Daw, 201 F.3d 521, 524 n.l (4th Cir. 2000).

         C. ...

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